Gold Sees Modest Gains as Bulls Continue to Show Resilience

(Kitco News) - Gold prices ended the U.S. day session firmer Tuesday. The key “outside markets” were in a bullish posture for the precious metals markets, as the U.S. dollar index was lower and crude oil prices were solidly higher. Gold prices continue to show resilience despite a lack of major, fresh bullish fundamental news in the marketplace. June Comex gold was last up $3.30 at $1,243.50 an ounce. July Comex silver was last up $0.101 at $17.16 an ounce.

Gold prices erased early-morning losses in the wake of a weaker-than-expected U.S. durable goods orders report issued at 8:30 a.m. eastern time. The downbeat data falls into the camp of the U.S. monetary policy doves, who do not want the Federal Reserve to raise interest rates any time soon. The weak durables report also put more selling pressure on the U.S. dollar index. The recent weaker greenback has been a bullish underlying factor for the precious metals and for the raw commodity sector.

Nymex crude oil prices were solidly higher in afternoon trading, and hovering above $44.00 a barrel. Crude prices are hovering near a 4.5-month high. The recent rally in the oil market is a clue prices have put in a major bottom, and also that the raw commodity sector has done the same.

Traders and investors are looking ahead to the meeting of the U.S. Federal Open Market Committee (FOMC), which began this morning and ends early Wednesday afternoon with a statement. No changes in U.S. monetary policy are expected at this meeting. However, the statement at the end of the meeting could provide clues on the timing of the next monetary policy move by the FOMC. FOMC statements have been significant markets-movers in the recent past.

The Bank of Japan holds its regular monetary policy meeting on Thursday. The BOJ is battling slow economic growth, price deflation and an appreciating yen on the world foreign exchange market.

Technically, June gold futures prices closed nearer the session high. The gold bulls have the overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,272.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,225.00. First resistance is seen at today’s high of $1,246.50 and then at $1,250.00. First support is seen at today’s low of $1,232.70 and then at $1,225.00. Wyckoff’s Market Rating: 6.0

July silver futures prices closed nearer the session high today. The silver market bulls have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.25. First resistance is seen at $17.414 and then at $17.50. Next support is seen at $16.80 and then at $16.50. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed down 85 points at 224.75 cents today. Prices closed near mid-range on more profit taking after hitting a four-week high last Friday. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the March high of 232.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of 214.00 cents. First resistance is seen at this week’s high of 227.25 cents and then at last week’s high of 230.20 cents. First support is seen at today’s low of 222.65 cents and then at 221.00 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com